Buying a view easement?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
LeftCoastIV
Posts: 393
Joined: Wed May 01, 2019 7:19 pm

Buying a view easement?

Post by LeftCoastIV »

A group of neighbors including myself are interested in purchasing a view easement from a nearby property, that would allow us to open up the view and maintain the view over time. The owner has been supportive of view maintenance work in the past, but is selling the house soon. We would like to secure perpetual rights to maintain the view before he sells.

The real estate market is so hot in our area that I doubt the view easement would impact his ability to sell for top dollar. That said, this would be a hassle for him to deal with versus just selling the house.

The easement would be worth a lot to us, although we would still need to comply with city codes on tree work. We are ok with that. As context, this is a VHCOL area and the view could be worth hundreds of thousands of dollars.

I’m thinking we may need to put a $ number out there that is sufficient to persuade him.

Any suggestions on:

A. how to go about this? We would likely have a real estate attorney draw up the agreement and have it recorded on the property.

B. how to value the easement? Of course it’s worth “whatever someone will pay for it” like anything else

The biggest challenge is that the owner just says no.

The property itself is very expensive, and far more than I want to pay to buy it outright, slap on the easement, and then resale it, as the State would charge an excise tax plus we’d pay agent fee(s). That’s the last resort I suppose.

Thanks
Last edited by LeftCoastIV on Wed Jul 21, 2021 2:16 pm, edited 2 times in total.
User avatar
JoeRetire
Posts: 8756
Joined: Tue Jan 16, 2018 2:44 pm

Re: Buying a view easement?

Post by JoeRetire »

LeftCoastIV wrote: Wed Jul 21, 2021 1:30 pm A group of neighbors including myself are interested in purchasing a view easement from a nearby property

The easement would be worth a lot to us

the view could be worth hundreds of thousands of dollars.
Sounds like you need to be prepared to pay "a lot".
The best approach is to get the seller to suggest the price first. "What would it take for you to sell this "view easement"?" should start a lively conversation.
Just remember: it's not a lie if you believe it.
jarjarM
Posts: 1266
Joined: Mon Jul 16, 2018 1:21 pm

Re: Buying a view easement?

Post by jarjarM »

Sorry, don't have any suggestions but I was a bit surprise that there's view easement. There's no view protection in CA :oops: :x

https://hansonlawfirm.com/oh-say-can-yo ... alifornia/
Mike Scott
Posts: 1798
Joined: Fri Jul 19, 2013 2:45 pm

Re: Buying a view easement?

Post by Mike Scott »

The easy way is to buy the property and just keep it to maintain control. Could the property work as a rental to offset some of the cost?
Topic Author
LeftCoastIV
Posts: 393
Joined: Wed May 01, 2019 7:19 pm

Re: Buying a view easement?

Post by LeftCoastIV »

Mike Scott wrote: Wed Jul 21, 2021 1:44 pm The easy way is to buy the property and just keep it to maintain control. Could the property work as a rental to offset some of the cost?
Purchase price for property is likely $5M plus
123
Posts: 7586
Joined: Fri Oct 12, 2012 3:55 pm

Re: Buying a view easement?

Post by 123 »

Just curious how you would define the view easement. Is the subject property level. Would the easement prevent the property owner from building structure or have trees over something like 20 to 30 feet tall? Seems like you would need to define the base elevation above sea level for the easement so that might need a survey. I wonder if the easement will incur property taxes?

I know there are some commercial property owners in San Francisco have sold the "air rights" above their properties so they are prevented from building anything higher. Those rights get purchased by nearby properties to allow them to build higher or build with windows to the property line knowing that the neighboring property can not build higher and block the windows.
The closest helping hand is at the end of your own arm.
Topic Author
LeftCoastIV
Posts: 393
Joined: Wed May 01, 2019 7:19 pm

Re: Buying a view easement?

Post by LeftCoastIV »

JoeRetire wrote: Wed Jul 21, 2021 1:35 pm
LeftCoastIV wrote: Wed Jul 21, 2021 1:30 pm A group of neighbors including myself are interested in purchasing a view easement from a nearby property

The easement would be worth a lot to us

the view could be worth hundreds of thousands of dollars.
Sounds like you need to be prepared to pay "a lot".
The best approach is to get the seller to suggest the price first. "What would it take for you to sell this "view easement"?" should start a lively conversation.
And this would avoid the “winner’s curse” of offering more than needed.
Reamus294
Posts: 151
Joined: Wed Jul 24, 2019 8:54 am

Re: Buying a view easement?

Post by Reamus294 »

JoeRetire wrote: Wed Jul 21, 2021 1:35 pm
Sounds like you need to be prepared to pay "a lot".
The best approach is to get the seller to suggest the price first. "What would it take for you to sell this "view easement"?" should start a lively conversation.
+1

Since the price can vary by a large amount, I agree with this. That way you have something to go with your neighbors to. If the owner says no or doesn’t get back to you, then I’d go to your neighbors and see how much everyone is willing to pay so you can go with a good offer.
As a seller, I wouldn’t want a viewing easement restriction to mess up a 5mil deal, but if I was in your place i’d ask because it can’t hurt to ask.
HomeStretch
Posts: 6561
Joined: Thu Dec 27, 2018 3:06 pm

Re: Buying a view easement?

Post by HomeStretch »

Perhaps a realtor can help you estimate what your property is worth “with” and “without” the view to assist you/your group in making an offer/counteroffer.
User avatar
RickBoglehead
Posts: 7234
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Buying a view easement?

Post by RickBoglehead »

I'd probably want to make sure that the easement was written by an attorney. My family had a place one lot back from the ocean in HCOL vacation spot. There was an easement on the property in front allowing the community owner (private company) to trim X feet back to maintain the view. Promptly after building, my parents asked for the view to be maintained, as it hadn't been. The company got to work vigorously cutting back, and the owner of the lot was outraged - apparently he didn't understand that he had purchased property years back with an easement. Eventually, long after my parents left, his lot was sold and the house demolished for a new house - no idea as to the state of the easement.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
Carefreeap
Posts: 3104
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: Buying a view easement?

Post by Carefreeap »

First you need to define what the View Easement is. Keeping the house at two stories? Preventing tree planting over x feet? And so on. A real estate attorney with experience with easements can help you.

It's possible there is already a height limit in place. Many subdivisions have them. You need to review the CC&Rs of the property as well as checking local city regulations to see if the CC&Rs are still current.

Once you've defined the easement then an appraiser who specializes in easements comes up with a value for the "Before" condition and the "After (the easement)" condition. Be prepared to pay a little more than the difference and the owner's fees.

This is complicated stuff which will involves a fair amount of land use planning as the easement runs in perpetuity with the parcel. It can not only involve height but also density, possibly floor area ratios.

If I were an owner in this situation I'd tell you to make me an offer for the entire property and then you (buyer) can figure out what you want, establish the easement and then sell whatever remaining rights there are.

With multiple parties involved I'm not optimistic this plan will work but good luck and report back with what happens.
Every day I can hike is a good day.
Carefreeap
Posts: 3104
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: Buying a view easement?

Post by Carefreeap »

RickBoglehead wrote: Wed Jul 21, 2021 2:50 pm I'd probably want to make sure that the easement was written by an attorney. My family had a place one lot back from the ocean in HCOL vacation spot. There was an easement on the property in front allowing the community owner (private company) to trim X feet back to maintain the view. Promptly after building, my parents asked for the view to be maintained, as it hadn't been. The company got to work vigorously cutting back, and the owner of the lot was outraged - apparently he didn't understand that he had purchased property years back with an easement. Eventually, long after my parents left, his lot was sold and the house demolished for a new house - no idea as to the state of the easement.
This situation is pretty common. Either people don't read their title reports carefully or they don't understand what they are reading.

Easements can run for a set period of years or in perpetuity. In the latter case the granting party (or its sucessor interest) has to agree to extinguish their rights. This often happens when utilities relocate or a property is redeveloped and assembled with other parcels. At that point it can make no sense to have an easement clouding title.

I ran into some fun stuff working for a Railroad and a public agency. :D
Every day I can hike is a good day.
User avatar
Watty
Posts: 23071
Joined: Wed Oct 10, 2007 3:55 pm

Re: Buying a view easement?

Post by Watty »

One thing to add to your list of things to research is that if the current owner has a mortgage then they may not be able to sell you a view easement without the lenders approval even if they wanted to. This would be because that would impair the value of the property that secures the mortgage.

That would so far out of the normal rules and procedures I doubt that the lender would even know what to do they were asked about granting an easement like that so it would be easier to just say 'no' to the request than to have their lawyers try figure out what to do and risk any liability if there is a problem.
nordsteve
Posts: 859
Joined: Sun Oct 05, 2008 9:23 am

Re: Buying a view easement?

Post by nordsteve »

I was involved in a project with the goal of acquiring an easement along lakeshore to construct a trail. Ultimately the route taken was to acquire properties on a willing seller basis, create the necessary easement, and then immediately resell the property.

TBH I think you'd get a better deal overall taking this approach. That said, I can see how it would be difficult to get a bunch of homeowners to band together to implement it.
Carefreeap
Posts: 3104
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: Buying a view easement?

Post by Carefreeap »

nordsteve wrote: Wed Jul 21, 2021 5:55 pm I was involved in a project with the goal of acquiring an easement along lakeshore to construct a trail. Ultimately the route taken was to acquire properties on a willing seller basis, create the necessary easement, and then immediately resell the property.

TBH I think you'd get a better deal overall taking this approach. That said, I can see how it would be difficult to get a bunch of homeowners to band together to implement it.
Was the easement done by a local non-profit or governmental agency? In addition to $$$ sellers can sometimes take a tax deduction going this route.
Every day I can hike is a good day.
SouthernInvestor
Posts: 17
Joined: Thu Jul 15, 2021 6:13 am

Re: Buying a view easement?

Post by SouthernInvestor »

I would make an offer, and ask the seller *as a favor* to have their agents inform buyers of the offer.

If you get lucky, a cash buyer will purchase and accept the offer.

Where financing is involved, it's going to get too complex and I don't see a seller who's going to cash out anyway want to take the risk of encumbering their property.
oldmotos
Posts: 131
Joined: Fri Aug 04, 2017 9:37 pm

Re: Buying a view easement?

Post by oldmotos »

If I was the seller I would probably ask for you to make an offer on the easement and let potential buyers know they can accept the offer or deny the easement. Too many unknowns for the seller otherwise.
stan1
Posts: 10353
Joined: Mon Oct 08, 2007 4:35 pm

Re: Buying a view easement?

Post by stan1 »

Bring in a top tier real estate attorney. This involves multiple presumably high net worth people including you, your neighbors, a seller who needs to be willing, plus eventual buyer (meaning it needs to be bullet proof without a loophole). Also maybe eventual buyers of your home and your neighbors homes. You'd need something like a HOA or other legal entity to "own" the view easement and pay for maintenance. Definitely not an ad hoc arrangement.
MishkaWorries
Posts: 1071
Joined: Wed Aug 14, 2019 4:39 pm

Re: Buying a view easement?

Post by MishkaWorries »

LeftCoastIV wrote: Wed Jul 21, 2021 1:30 pm A group of neighbors including myself are interested in purchasing a view easement from a nearby property, that would allow us to open up the view and maintain the view over time. The owner has been supportive of view maintenance work in the past, but is selling the house soon. We would like to secure perpetual rights to maintain the view before he sells.

The real estate market is so hot in our area that I doubt the view easement would impact his ability to sell for top dollar. That said, this would be a hassle for him to deal with versus just selling the house.

The easement would be worth a lot to us, although we would still need to comply with city codes on tree work. We are ok with that. As context, this is a VHCOL area and the view could be worth hundreds of thousands of dollars.

I’m thinking we may need to put a $ number out there that is sufficient to persuade him.

Any suggestions on:

A. how to go about this? We would likely have a real estate attorney draw up the agreement and have it recorded on the property.

B. how to value the easement? Of course it’s worth “whatever someone will pay for it” like anything else

The biggest challenge is that the owner just says no.

The property itself is very expensive, and far more than I want to pay to buy it outright, slap on the easement, and then resale it, as the State would charge an excise tax plus we’d pay agent fee(s). That’s the last resort I suppose.

Thanks
Didn't you already answer your question?
We plan. G-d laughs.
Post Reply